According to the American Association for Retired Persons (AARP), that depends largely on how long you live. A healthy, upper-middle-class couple age 65 in 2015 has a 43% chance that one or both partners will live to see 95.* That’s a potential 30+ years in retirement!
For a retired couple to generate $40,000 a year in income after they stop working, AARP estimates they would need savings of about $1.18 million to support a 30-year retirement. However, it’s important to keep in mind that taxes, inflation, rising health care costs can erode the purchasing power of those assets over time, so 20 or 30 years from now, an annual income of $40,000 may not be enough to support your basic lifestyle needs, especially if one of both spouses incur serious health issues.
Knowing how much to save for retirement is extremely important, but complex to calculate. Your plan should reflect your lifestyle goals and risk tolerance, and take interest rates, market fluctuations, and rising health care costs into consideration.
Seth Peritzman is a wealth manager at First Allied Securities, an independently owned, full service brokerage firm. Seth has been is in the Financial industry for over twenty years. Seth provides wealth management advice for high net worth individuals and also manages retirement plans. Seth’s independence allows him to offer and unbiased, objective approach to serving your investment needs.
Seth Peritzman is a wealth manager offering securities through First Allied Securities, Member: FINRA/SIPC and advisory services through First Allied Advisory Services.